Dive Brief:

ESA alleges that PJM’s changed its Reg D rules without FERC review or approval in violation of Commission precedent.

ESA wants FERC to direct PJM to revert to its previous Reg D rules and to require the RTO to file any changes in how it handles frequency response with the federal regulator.

Dive Insight:

PJM was the first RTO to incorporate FERC’s 2011 Order 755 into its tariff, which sought to remove discrimination in the frequency regulation market. But the ensuing rush of energy storage projects altered the resource mix for the shortest responding section of PJM’s regulation market, Reg D resources.

That created conflicts in balancing the Reg D market, which has a 2 second response time suitable for batteries, and Reg A, which has 4 second response time and is comprised largely of traditional generators.

In 2015 PJM put a temporary halt on its Reg D regulation market in order to study issues resulting from the flood of storage projects. For a time, the grid operator's frequency regulation market was the largest in the nation, notes Energy Storage News, estimated at 265 MW.

PJM has since made two adjustments to its regulation market. In 2015, it capped the amount of Reg D resources it would procure, and in January 2017 removed constraints on its Reg D signal that preserved energy neutrality.

ESA claims that those changes have introduced an inconsistent approach to the use of regulation resources and, as a result, PJM has been relying too heavily on “regulation reserves to provide longer-term response beyond the intended use of the regulation product.”

"When energy neutrality was eliminated in the January 2017 Signal Change, ESA’s members began to see the full nature of the response requested by PJM, with almost daily pegging to remove excess generation from the system," the group's complaint reads. "This has disregarded the very operational characteristics of limited-energy resources that the RegD signal was designed to respect."

PJM has maintained that none of its changes to its regulation signal constituted a tariff change, but ESA disagrees and is seeking FERC to compel the RTO to seek FERC approval for those regulation market changes.